Cost Structure And Performance Of Higher Education Institutions In China

The core theme of this research is to understand the theoretical and empirical underpinnings of cost structure and performance of Higher Educations institutions in China. The research uses a number of variable inputs/outputs to estimate the cost structure of institutions of higher learning in various regions of the country. In addition, we also consider other variables that capture the quality of education, region and time factors to assess their contribution.With china's opening out to the world and the introduction of new education reform, there has been a high demand for post-secondary education. As the competition and demand for government financing in sectors other than education increases, government has had to find a replacement for sources of funding for higher education by the introduction of tuition fees. By taking a closer look at higher education, this research hopes to answer a number of pertinent questions. What is the status of higher education at the undergraduate and postgraduate level in China? What are the financing mechanisms for higher education in China and what is the dominant funding philosophy for primary, secondary, and tertiary education? What proportion of the funding comes from the government and what proportion comes from tuition fees? What are the determinants of increasing costs of higher education in The People's Republic of China? What is the cost structure of colleges and universities in the various provinces of China and how technically efficient are these institutions? These and many more issues form the crux of the research matter.The main objectives of the research are fivefold. Firstly, to identify the underlining key factors behind escalating educational costs in China. This is vital in understanding the breadth and depth of the problem of rising costs of higher education and it provides a platform for comparison of the experiences of other countries. Are there cost-increasing factors that are peculiar to China and what are these factors? Secondly, to identify the changes arising from the education reforms and its effects on cost structure. Education reform in China has been long and exceptionally complex. How has the education reform process at the tertiary level influenced the cost structure of institutions of higher learning? Thirdly, to estimate the cost structure of institutions of higher learning across the different provinces and regions of China. Universities are multi-product producers of education services and the typical university produces education services not just in one discipline, but multiple disciplines. In addition, universities produce graduates at the undergraduate, postgraduate and increasingly post-doctoral level. What production function of the Chinese university can we estimate given the theoretic and empirical evidence and how do these compare across the provinces and regions? Fourthly, to try and assess the production efficiency of Chinese universities across the country. Given the production estimates of the thousands of universities in the 31 provinces of China, we estimate the production efficiency of each decision-making unit and attempt to unravel the underlying causes of variability of efficiency in the various provinces. Fifthly, to administer a questionnaire-based survey of the determinants of quality of education at Wuhan University of Technology.The research applies liner regression, stochastic frontier analysis and data envelopment analysis to analyze the data. All the statistical methods and approaches reveal consistently similar estimates of costs suggesting that the patterns and structure of costs in institutions of higher education across the regions is similar. Variations are observed on a year-to-year as well as regional basis. Education institutions in well-endowed regions are likely to be more efficient in delivery of service than in economically needy areas where there is minimal education investment.